Core Viewpoint - Tompkins Financial Corporation is prioritizing dividend maintenance over the quality of its earnings, resulting in a decline in stock price over the past four and a half years [1] Company Analysis - The company's focus on maintaining dividends has led to compromises in earnings quality [1] - This strategy has negatively impacted the stock price, indicating potential underlying issues within the company's financial health [1]

Financial Performance - Net income attributable to Tompkins Financial Corporation was $19,679 thousand for Q1 2025, compared to $16,872 thousand in Q1 2024, indicating a year-over-year increase of 16.5%[17]. - Basic earnings per share increased to $1.38 for the three months ended March 31, 2025, up from $1.19 in the same period last year, representing a growth of 16.1%[17]. - The company reported a total comprehensive income of $35,961 thousand for the three months ended March 31, 2025, compared to $7,061 thousand in the same period last year, indicating a significant improvement in overall financial performance[19]. - For the three months ended March 31, 2025, the consolidated net income attributable to Tompkins Financial Corporation was $19,679,000, compared to $16,872,000 for the same period in 2024, representing an increase of approximately 16.5%[113][114]. - Net interest income for the three months ended March 31, 2025, was $56,662,000, compared to $50,675,000 for the same period in 2024, reflecting an increase of approximately 11.7%[113][114]. - Noninterest income for the three months ended March 31, 2025, totaled $25,032,000, compared to $22,137,000 in the prior year, marking an increase of about 13.0%[113][114]. - Noninterest income for Q1 2025 was $8.6 million, up $1.5 million or 21.6% compared to Q1 2024, including a gain on the sale of other real estate owned of $1.9 million[175]. - Noninterest expense for Q1 2025 was $39.7 million, an increase of $330,000 or 0.8% from Q1 2024, primarily due to higher salaries and employee benefits[176]. Asset and Deposit Growth - Total assets increased to $8,199,653 thousand as of March 31, 2025, up from $8,109,080 thousand as of December 31, 2024, representing a growth of 1.1%[15]. - Total deposits grew to $6,753,502 thousand, an increase of 4.4% from $6,471,805 thousand at the end of 2024[15]. - Total assets as of March 31, 2025, were $8.2 billion, an increase of $90.6 million or 1.1% from December 31, 2024[199]. - The company reported total deposits of $6,753,502,000 as of March 31, 2025, compared to $6,449,616,000 as of March 31, 2024, reflecting a growth of about 4.7%[113][114]. Loan and Lease Performance - Net loans and leases rose to $6,005,622 thousand, an increase of 0.7% from $5,963,426 thousand at the end of 2024[15]. - Total loans and leases increased to $6,071,523 thousand as of March 31, 2025, up from $6,025,108 thousand on December 31, 2024, representing a growth of 0.77%[55]. - The total past due loans as of March 31, 2025, amounted to $71,113 thousand, compared to $52,907 thousand on December 31, 2024, reflecting an increase of 34.6%[57][59]. - The commercial real estate segment showed a total of $3,426,172 thousand in loans as of March 31, 2025, up from $3,379,817 thousand at the end of 2024, marking a growth of 1.37%[55]. - The residential real estate loans remained stable with a total of $1,571,953 thousand as of March 31, 2025, slightly increasing from $1,570,840 thousand at the end of 2024[55]. - Total loans and leases at the end of Q1 2025 were $6.07 billion, up from $6.02 billion at the end of 2024[207]. Credit Loss Provisions and Allowances - The provision for credit loss expense was $5,287 thousand for Q1 2025, significantly higher than $854 thousand in Q1 2024, reflecting increased caution in credit risk management[17]. - The allowance for credit losses (ACL) methodology is based on SEC guidance and is critical for evaluating credit loss exposure in the loan portfolio[62]. - The allowance for credit losses on loans and leases increased to $61,023,000 as of March 31, 2025, up from $51,704,000 as of March 31, 2024, representing a 17.9% increase[71][72]. - The provision for credit loss expense for the three months ended March 31, 2025, was $5,260,000, compared to $348,000 for the same period in 2024, indicating a significant increase in provisions[71][72]. - The total gross write-offs for the current period in Commercial and Industrial loans were $0, maintaining a stable performance compared to previous years[82]. Regulatory Compliance and Risk Management - Tompkins Financial Corporation is subject to comprehensive regulation by the Federal Reserve Board and other regulatory authorities, ensuring compliance with various financial regulations[27][28]. - The company manages economic risks, including interest rate, liquidity, and credit risk, primarily through the management of its assets and liabilities[136]. - Regulatory compliance is critical, with oversight from multiple agencies including the Federal Reserve Board and the SEC[159]. Market and Competitive Landscape - The Company faces strong competition from various financial institutions, including banks, credit unions, and online financial services[157][158]. - Tompkins Financial Corporation aims for responsible and sustainable growth, focusing on organic growth and potential acquisitions of financial institutions[152]. Other Financial Metrics - Return on average assets (ROA) for Q1 2025 was 0.99%, compared to 0.87% in Q1 2024, while return on average shareholders' equity (ROE) increased to 10.96% from 10.18%[170]. - The banking segment reported net income of $15.7 million for Q1 2025, a 15.7% increase from $13.6 million in Q1 2024, primarily due to higher net interest margin and other income[172]. - Net interest margin improved to 2.98% in Q1 2025 from 2.73% in Q1 2024, primarily due to lower funding costs and higher yields on interest-earning assets[185].

Company Overview - Tompkins Financial (TMP) is headquartered in Ithaca and has experienced a price change of -12.13% this year [3] - The company currently pays a dividend of $0.62 per share, resulting in a dividend yield of 4.16%, which is significantly higher than the Banks - Northeast industry's yield of 2.87% and the S&P 500's yield of 1.63% [3] Dividend Performance - The annualized dividend of Tompkins Financial is $2.48, reflecting a 1.6% increase from the previous year [4] - Over the past five years, the company has increased its dividend four times, achieving an average annual increase of 3.89% [4] - The current payout ratio stands at 48%, indicating that the company distributes 48% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Tompkins Financial's earnings per share for 2025 is $5.58, representing a year-over-year growth rate of 12.27% [5] Investment Appeal - Tompkins Financial is characterized as an attractive dividend play and a compelling investment opportunity, currently holding a Zacks Rank of 2 (Buy) [7]

Group 1: Earnings Performance - Tompkins Financial reported quarterly earnings of $1.37 per share, exceeding the Zacks Consensus Estimate of $1.30 per share, and up from $1.18 per share a year ago, representing an earnings surprise of 5.38% [1] - The company posted revenues of $81.69 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.07%, compared to $72.81 million in the same quarter last year [2] Group 2: Stock Performance and Outlook - Tompkins shares have declined approximately 12.1% since the beginning of the year, while the S&P 500 has decreased by 6.8% [3] - The current consensus EPS estimate for the upcoming quarter is $1.27 on revenues of $79.49 million, and for the current fiscal year, it is $5.46 on revenues of $326.57 million [7] Group 3: Industry Context - The Banks - Northeast industry, to which Tompkins belongs, is currently ranked in the top 26% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Tompkins' stock performance [5]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Tompkins Financial Corporation reported strong Q1 2025 results, with diluted EPS of **$1.37** and net income of **$19.7 million**, driven by net interest income growth despite higher credit loss provisions Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Diluted EPS | $1.37 | $1.18 | +16.1% | | Net Income | $19.7 million | $16.9 million | +16.6% | | Net Interest Margin | 2.98% | 2.73% | +25 bps | | Total Loans | $6.07 billion | $5.64 billion | +7.6% | | Total Deposits | $6.75 billion | $6.45 billion | +4.7% | - The increase in net income was primarily driven by higher net interest income from loan growth and stabilized funding costs, along with growth in fee-based revenues, partially offset by a significantly higher provision for credit loss expense[2](index=2&type=chunk) - Provision for credit loss expense was **$5.3 million**, a substantial increase from **$854,000** in Q1 2024 and **$1.4 million** in Q4 2024[4](index=4&type=chunk)[14](index=14&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) Q1 2025 performance featured strong net interest income and margin expansion, boosted by a one-time gain, but asset quality weakened due to increased credit loss provisions [Net Interest Income](index=3&type=section&id=NET%20INTEREST%20INCOME) Net interest income increased **11.8%** year-over-year to **$56.7 million**, driven by a **25 bps** net interest margin expansion to **2.98%** and **7.2%** average loan growth Net Interest Income and Margin Analysis | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $56.7M | $56.3M | $50.7M | | Net Interest Margin | 2.98% | 2.93% | 2.73% | | Average Loans | $6.03B | $5.93B | $5.62B | - The increase in NIM compared to the prior year was mainly due to higher yields on average interest-earning assets (**4.69%** in Q1 2025 vs **4.47%** in Q1 2024) and lower funding costs from an improved funding mix[6](index=6&type=chunk)[7](index=7&type=chunk) - Average total deposits grew by **4.0%** year-over-year to **$6.6 billion**[8](index=8&type=chunk) [Noninterest Income and Expense](index=4&type=section&id=NONINTEREST%20INCOME%20AND%20EXPENSE) Noninterest income rose **13.1%** to **$25.0 million** due to a real estate sale gain, while noninterest expense increased modestly by **1.5%** to **$50.6 million** from employee costs Noninterest Income & Expense (Q1 2025 vs Q1 2024) | Category | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Noninterest Income | $25.0M | $22.1M | +13.1% | | Total Noninterest Expense | $50.6M | $49.9M | +1.5% | - A **$1.9 million** gain on the sale of other real estate owned was the primary driver of the increase in noninterest income[10](index=10&type=chunk) - The increase in noninterest expense was mainly due to a **$969,000** (**3.1%**) rise in salaries and wages and other employee benefits[11](index=11&type=chunk) [Asset Quality](index=4&type=section&id=ASSET%20QUALITY) Asset quality weakened in Q1 2025, with provision for credit losses surging to **$5.3 million** due to a **$4.2 million** specific reserve on a commercial real estate loan Asset Quality Indicators | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Provision for Credit Losses | $5.3M | $1.4M | $0.85M | | Allowance for Credit Losses / Total Loans | 1.01% | 0.94% | 0.92% | | Nonperforming Assets / Total Assets | 0.87% | 0.80% | 0.81% | | Nonperforming Loans | $71.1M | $50.9M | $62.7M | - A specific reserve of **$4.2 million** was added for one commercial real estate relationship totaling **$18.1 million**, which was a major driver for the increased provision expense[13](index=13&type=chunk)[14](index=14&type=chunk) - The increase in nonperforming assets was largely due to moving one **$17.3 million** commercial real estate loan into nonperforming status[15](index=15&type=chunk) [Balance Sheet, Capital, and Liquidity](index=5&type=section&id=Balance%20Sheet,%20Capital,%20and%20Liquidity) The company maintained strong capital ratios well above regulatory minimums and a stable liquidity position with **$1.5 billion** in accessible funding sources as of March 31, 2025 [Capital Position](index=5&type=section&id=CAPITAL%20POSITION) Capital ratios remained robust and exceeded regulatory requirements, with Tier 1 capital to average assets improving to **9.31%** at Q1 2025 Key Capital Ratios | Ratio | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Tier 1 Capital to Average Assets | 9.31% | 9.27% | 9.08% | | Total Capital to Risk-Weighted Assets | 13.28% | 13.07% | 13.43% | - Capital ratios at March 31, 2025 remained well above the regulatory minimums for well-capitalized institutions[17](index=17&type=chunk) [Liquidity Position](index=5&type=section&id=LIQUIDITY%20POSITION) The company maintained a stable liquidity position with ready access to **$1.5 billion**, representing **18.6%** of total assets, through various wholesale funding sources - The company maintained ready access to liquidity of **$1.5 billion**, or **18.6%** of total assets, at March 31, 2025[18](index=18&type=chunk) - Liquidity is enhanced by access to Federal funds, repurchase agreements, brokered deposits, Federal Reserve Bank's Discount Window, and FHLB advances[18](index=18&type=chunk) [Financial Statements and Supplementary Data](index=8&type=section&id=Financial%20Statements%20and%20Supplementary%20Data) This section presents detailed unaudited financial statements for Q1 2025, including Consolidated Statements of Condition and Income, along with supplementary data and non-GAAP measure reconciliations [Consolidated Statements of Condition](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CONDITION) The Consolidated Statement of Condition as of March 31, 2025, shows total assets of **$8.20 billion**, supported by increased deposits to **$6.75 billion** and total equity to **$741.4 million** Balance Sheet Highlights (in thousands) | Account | Mar 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $8,199,653 | $8,109,080 | | Net Loans and Leases | $6,005,622 | $5,963,426 | | Total Deposits | $6,753,502 | $6,471,805 | | Total Equity | $741,377 | $713,444 | [Consolidated Statements of Income](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For Q1 2025, the company reported Net Interest Income of **$56.7 million** and Net Income of **$19.7 million**, compared to **$50.7 million** and **$16.9 million** respectively in Q1 2024 Income Statement Summary (in thousands) | Account | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $56,662 | $56,281 | $50,675 | | Provision for credit loss | $5,287 | $1,411 | $854 | | Noninterest Income | $25,032 | $20,829 | $22,137 | | Noninterest Expense | $50,607 | $49,966 | $49,857 | | Net Income | $19,679 | $19,658 | $16,872 | [Non-GAAP Measures](index=13&type=section&id=Non-GAAP%20Measures) This section provides a reconciliation for the non-GAAP measure of Tangible Book Value Per Share, which increased to **$44.88** in Q1 2025 Tangible Book Value Per Share (Non-GAAP) | Metric | Mar 31, 2025 | Dec 31, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | :--- | | Common equity book value per share (GAAP) | $51.36 | $49.42 | $46.37 | | Tangible book value per share (Non-GAAP) | $44.88 | $42.93 | $39.85 |

Company Overview - Tompkins Financial (TMP) is based in Ithaca and operates in the Finance sector, with a year-to-date share price change of -16.29% [3] - The company currently pays a dividend of $0.62 per share, resulting in a dividend yield of 4.37%, which is higher than the Banks - Northeast industry's yield of 3.2% and the S&P 500's yield of 1.64% [3] Dividend Performance - The current annualized dividend of Tompkins Financial is $2.48, reflecting a 1.6% increase from the previous year [4] - Over the past five years, the company has increased its dividend four times, achieving an average annual increase of 3.89% [4] - The company's payout ratio stands at 50%, indicating that it distributes 50% of its trailing 12-month earnings per share as dividends [4] Earnings Growth - The Zacks Consensus Estimate for Tompkins Financial's earnings per share for 2025 is $5.46, which represents a year-over-year earnings growth rate of 9.86% [5] Investment Considerations - Tompkins Financial is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [7]

Group 1 - The article suggests that investors should focus on bank stocks that have access to cheap funding and a history of low loan losses as a strategy for long-term investment [1] - A long-term, buy-and-hold investment approach is favored, particularly for stocks that can consistently deliver high-quality earnings, often found in the dividend and income sectors [1] Group 2 - The author shares insights on various US and Canadian stocks through 'The Compound Investor' and predominantly UK stocks on 'The UK Income Investor' [1]

Company Overview - Tompkins Financial (TMP) is headquartered in Ithaca and operates in the Finance sector [3] - The stock has experienced a price change of -4.91% since the beginning of the year [3] Dividend Information - Tompkins Financial currently pays a dividend of $0.62 per share, resulting in a dividend yield of 3.85% [3] - The average dividend yield for the Banks - Northeast industry is 2.76%, while the S&P 500's yield is 1.56% [3] - The company's annualized dividend of $2.48 has increased by 1.6% from the previous year [4] - Over the last 5 years, Tompkins Financial has increased its dividend 4 times year-over-year, averaging an annual increase of 4.01% [4] - The current payout ratio is 50%, indicating that the company pays out 50% of its trailing 12-month EPS as dividends [4] Earnings Growth - For the fiscal year, Tompkins Financial expects solid earnings growth, with the Zacks Consensus Estimate for 2025 at $5.46 per share, reflecting a year-over-year growth rate of 9.86% [5] Investment Appeal - Tompkins Financial is viewed as an attractive dividend play and a compelling investment opportunity, holding a Zacks Rank of 2 (Buy) [7]

Core Insights - Nxera Pharma's partner Tempero Bio has initiated a Phase 2 trial for TMP-301, targeting alcohol use disorder, with the trial registered under Clinical Trial ID: NCT06648655 [1] - Tempero Bio has closed a $70 million financing round to support the advancement of TMP-301 through the Phase 2 trial and to prepare for a second Phase 2 trial for cocaine use disorder [1][2] - The Phase 2 study will evaluate the safety, tolerability, and efficacy of TMP-301 compared to a placebo in patients with alcohol use disorder [2] Company Developments - Matt Barnes, EVP and President of Nxera Pharma UK, expressed excitement about the advancement of TMP-301, highlighting the strength of the NxWave™ discovery platform [3] - Nxera Pharma has a pipeline of over 30 active programs, focusing on unmet medical needs across various therapeutic areas, leveraging its GPCR-targeted structure-based drug discovery platform [8] - Nxera Pharma has a strategic equity stake in Tempero Bio and is eligible for future milestone payments and tiered royalties from product sales [4] Financial Aspects - The $70 million financing will be utilized for advancing TMP-301 through clinical trials and conducting preclinical studies for additional indications [1] - There are no milestone payments due from Tempero Bio to Nxera associated with the start of the Phase 2 trial [5]

Financial Performance and Risks - The Company's operations are heavily concentrated in New York State and Pennsylvania, making its financial performance highly dependent on economic conditions in these regions [116]. - The Company must maintain sufficient cash flow and liquid assets to meet financial obligations, with potential reliance on various funding sources including Federal funds and brokered deposits [117]. - Adverse developments in the banking industry have led to decreased confidence among investors and customers, contributing to market volatility and potential impacts on the Company's stock price [111]. - The Company evaluates its investment securities for expected credit-related impairment at least quarterly, which could affect earnings and financial condition [113]. - Liquidity may be adversely affected by the soundness of other financial institutions, impacting the Company's ability to access necessary funding [118]. - The Company relies on cash dividends from its subsidiaries for operations, and any discontinuation of these dividends could materially affect liquidity [123]. - Systemic weaknesses in the Federal Home Loan Bank system could lead to higher borrowing costs and reduced liquidity for the Company [121]. - The company is subject to legal proceedings that could result in significant penalties and reputational harm, impacting financial condition and operations [144]. Cybersecurity and Operational Risks - The Company is exposed to operational risks, including fraud and cybersecurity threats, which could result in financial losses or reputational harm [124][126]. - The company faces significant cybersecurity risks, with the threat of cyber-attacks increasing in volume and sophistication, potentially impacting business operations and financial results [127]. - The company collects and retains large volumes of sensitive customer data, which exposes it to additional risks related to cybersecurity threats and regulatory scrutiny [128]. - A security breach could lead to unauthorized access to confidential information, resulting in regulatory scrutiny, civil litigation, and reputational harm, adversely affecting financial condition and operations [130]. - The company relies on external vendors for critical services, and any failure of these vendors could disrupt operations and negatively impact financial results [131]. Regulatory Environment and Compliance - Changes in laws and regulations governing banks may arise from high-profile bank failures, potentially impacting the Company's capital requirements and operational results [112]. - The company operates in a highly regulated environment, and changes in laws and regulations could increase compliance costs and impact profitability [138]. - The company may face heightened regulatory requirements if total consolidated assets exceed $10 billion, which could lead to increased compliance costs [142]. Strategic and Market Risks - Strategic acquisitions carry risks that could negatively affect the company's financial condition and operational results [146]. - Climate change poses immediate and long-term risks to the company and its clients, including operational, credit, and reputational risks [133]. - The company’s insurance agency subsidiary, Tompkins Insurance, is affected by cyclical insurance premium rates, which can lead to revenue volatility [137]. Technological Developments and Challenges - The financial services industry faces rapid technological developments, particularly in Artificial Intelligence (AI) technologies [149]. - Challenges in achieving optimal accuracy, efficiency, and reliability in AI systems may limit their effectiveness [149]. - The regulatory framework surrounding AI technologies is still in early stages, posing potential legal and reputational risks [149]. - System failures or vulnerabilities in AI could compromise integrity, security, or privacy, affecting financial performance [149]. - Inefficiencies and increased costs may arise if AI technologies are not effectively managed [149]. Risk Management and Adaptability - The company emphasizes the importance of managing risks associated with the development of financial products and services [148]. - Significant investments in new products may lead to obsolescence or regulatory issues, impacting anticipated revenues [148]. - The company is exposed to complex risks as it expands its product offerings, including potential fraud [148]. - The company’s ability to adapt to evolving customer demands is critical for maintaining competitiveness [148]. - Failure to manage risks and uncertainties could have a material adverse effect on the company's business [148].